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Whirlpool Corporation (NYSE:WHR), a leading manufacturer of home appliances with a market capitalization of $4.85 billion and an impressive track record of maintaining dividend payments for 55 consecutive years, has entered into an Underwriting Agreement with several financial institutions for a public offering of senior notes, according to a recent 8-K filing with the Securities and Exchange Commission. InvestingPro data shows the company currently offers a substantial 7.96% dividend yield to shareholders.
On Monday, Whirlpool finalized an agreement with underwriters including Mizuho (NYSE:MFG) Securities USA LLC, BNP Paribas (OTC:BNPQY) Securities Corp., Citigroup (NYSE:C) Global Markets Inc., J.P. Morgan Securities LLC, and Wells Fargo (NYSE:WFC) Securities, LLC. The arrangement involves the issuance of $600 million aggregate principal amount of 6.125% Senior Notes due in 2030 and an additional $600 million aggregate principal amount of 6.500% Senior Notes due in 2033.
The offering, which closed today, was conducted in accordance with a registration statement and prospectus supplements filed with the SEC. Whirlpool plans to use the net proceeds from the sale of these notes to repay part of the outstanding amounts under its Term Loan Agreement with Sumitomo Mitsui (NYSE:SMFG) Banking Corporation and other lenders. According to InvestingPro data, the company’s total debt stands at $8.02 billion, with a concerning current ratio of 0.72, indicating that short-term obligations exceed liquid assets.
The notes were issued under an indenture dated March 20, 2000, between Whirlpool and U.S. Bank Trust Company, National Association, as trustee. A Certificate of Designated Officers establishing the terms of the notes was also filed as part of the 8-K report.
Legal counsel Kirkland & Ellis LLP provided an opinion on certain legal matters regarding the notes, which is included in the filed exhibits.
This financial move comes as Whirlpool continues to navigate the global appliance market, and it reflects the company’s strategy to manage its debt portfolio actively. The completion of this offering could provide Whirlpool with financial flexibility to meet its short-term obligations and invest in its long-term strategic goals. Based on InvestingPro analysis, which includes over 30 key financial metrics and detailed Fair Value calculations available in the Pro Research Report, the stock currently appears overvalued at current levels.
The details of the Underwriting Agreement and Certificate of Designated Officers are available in full text as exhibits to the 8-K filing, which serves as the source for this report.
In other recent news, Whirlpool Corporation reported its Q1 2025 earnings, revealing a slight miss on earnings per share (EPS) and revenue forecasts. The company posted an EPS of $1.70, just below the forecasted $1.71, and revenue of $3.62 billion, falling short of the expected $3.67 billion. Despite these misses, the company achieved a 2% growth in organic net sales and expanded global EBIT margins by 160 basis points. In response to its financial situation, Whirlpool plans to raise $1.2 billion through a bond sale to refinance its debt, following a credit rating downgrade to junk status by Fitch Ratings. Fitch cited high leverage and a negative outlook, projecting Whirlpool’s deleveraging to take longer than anticipated. Moody’s Ratings also downgraded Whirlpool’s senior unsecured ratings, reflecting ongoing operating challenges due to weak consumer demand and a sluggish US housing market. Loop Capital Markets adjusted its price target for Whirlpool shares, lowering it to $115 from $135, while maintaining a Buy rating. These developments highlight the challenges Whirlpool faces amid a complex financial landscape.
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